Trading stock can be performed in a variety of ways. One way to trade stock is to hire a broker who will perform the transactions on the client's behalf. Another manner to trade stock is to open an on-line account and trade stock using an on-line program found on the Internet. A third way is to purchase a computer program that permits the user to trade stock through use of a brokerage service. These examples are just three ways stock can be traded.
After a stock is purchased, the owner of the shares of stock usually desires to monitor the value of the shares. This is done in an effort to both avoid a significant loss financially should the value of the stock decrease and to increase profit should the value of the stock increase. In either case, once the stock is purchased, it is important to know how the value of it fluctuates, if at all.
When trading long, a stock's value decreases, many owners of the stock desire to sell their shares in order to avoid losing more money in the event that the stock's value continues to decline further. Once the stock is sold, either through a broker or through a computer program, the transaction is generally over. This means that if shares of stock are sold and then soon thereafter the stock's value increases to an amount where the individual may have wanted to repurchase the shares, the individual must instruct the computer program or broker to purchase a specific number of shares. Put another way, when the stock's value rises, the computer program or broker generally will not automatically repurchase shares that were previously sold. Thus, separate steps are required, both of which must be initiated by the individual. As a result, the individual could not only lose money by selling the shares of stock at a loss, but he could also fail to make money because he did not repurchase the stock when the stock's value began to increase past his previously sold price.
When purchasing stock through the use of a computer, when the user wishes to buy a stock, he or she generally instructs the program being used to buy the stock. The price at which the user is willing to purchase the shares of stock is referred to as the ask price. Then, if the user wishes to sell the stock he can do so, again by instructing the computer to do so. These buying and selling transactions are generally performed as two separate transactions, and the user must initiate both. There are at least three different methods to trade stock long, short, or both. Trading long occurs when an individual owns shares of stock and sells them later when the per share value has increased in price in order to generate a profit. An investor who sells stock short borrows shares from a brokerage house and sells them to another buyer. Proceeds from the sale go into the shorter's account. He must buy those shares back (cover) at some point in time and return them to the lender. When an individual sells short, he is anticipating that the value per share of stock is going to decrease which would result in his being able to earn a profit when he repurchases the shares and “returns” them to the rightful owner.
When trading long, a user can instruct a computer program of the current art to sell stock when the stock's value reaches a certain desirable amount. The value of a stock at any given moment is known as the bid price. However, once the stock is sold, the program no longer monitors the value of the stock that was just sold. As a result, if the stock was sold and declined in value, the user limited his loss by selling the stock. If however, the stock's value increased at least back to the price at which it was sold, the user essentially lost money because he could have repurchased the stock as soon as the stock's value equaled the price at which it was previous sold. Similar considerations apply when stock is traded short.
Thus, there is the need for a computer program that continuously monitors the value per share of stock after shares are sold and then automatically repurchases the shares when the value of the shares just sold reaches a specified amount. In other words, there is a need for a dynamic program for trading stock.